On April 23, the state of California became the first government ever to adopt a low-carbon fuel standard . The law is designed to set a base standard for the carbon content of the fuels burned by transportation vehicles in the state of California.
The carbon content is defined “from well to wheel.” That means the regulation takes into account the carbon burned to make the fuel, as well as the carbon released in burning it, when determining which fuels can be burned in that market. Fuels that are determined to be high in carbon-content are not welcome. The goal is to help California slash emissions in automotive fuels and spur the market for cleaner gasoline alternatives.
“California’s first in the world low-carbon fuel standard will not only reduce global warming pollution, it will reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure,” Governor Arnold Schwarzeneggersaid in a statement yesterday.
At least 11 other states are considering similar low-carbon fuel standard policies. Draft environmental legislation proposed by Congressmen Henry Waxman and Edward Market to the House of Representatives recommends bringing national U.S. fuel standards in line with California’s. And U.S. President Barack Obama campaigned on a promise to put policies in place designed to reduce greenhouse gas emissions 80% by 2050.
Considering the carbon content of oilsands syncrude from the Alberta oilpatch is among the highest in the world, this development has significant implications for Canadian exporters of Alberta syncrude. These were first discussed in Canadian Business in Go Green or Go Home , published June 2007.
California does not yet represent a major market for oilsands syncrude from Canada. However, should a version of this law be adopted in the rest of the United States, the implications for both the Canadian oilpatch, in terms of reducing the carbon content of its fuel, and for the cost of transportation fuel in the United States, are immense. Canada supplies the United States with approximately 13% of its fuel supply.